Press/Media Organization: Fraud Busting Body Language
Published Date: 12/21/2020
Author(s): Traci Brown
Fraud Busting: Cutting Off Al-Qaeda Funding with Tim McGuinness
Video Link: https://youtu.be/HhmOTtlD7fY?si=yv8DDw3nFiJiVdgU
Tim McGuinness visits Fraud Busting. He’s the expert on socially engineered cyber enabled crimes and fights fraud every day. We’ll learn how in the ‘80’s he helped introduce legislation that he now considers the root of all evil online. And he’ll fill us in on how he was targeted by Al-Queda and then helped bust their fraud scheme.
Here’s the transcript:
Traci Brown: Tim, thank you so much for coming on Fraud Busting today. I’m really honored that you’re here.
Tim McGuinness: Thank you.
Traci Brown: Now, tell us a little bit about you because I don’t think any intro I could do would really do you justice. What’s the ten-cent version? And then we’ll dive into deeper.
Tim McGuinness: Alright. My name is Dr. Tim McGuinness. I am the chairman and founder of an organization called SCARS, the Society of Citizens Against Relationship Scams. This is where I spend about 50% of my time, having been on observer of online crime now for the better part of 30 years. It will be 30 years actually in January. My background is I am a hard-core technologist, a software and hardware engineer. I hold many degrees. I have a couple of PhDs, one of which is in archeology and another one is in finance. I am also an anthropologist. Can you hear me well?
Traci Brown: Oh, yea. I got you.
Tim McGuinness: Perfect. Over the years I’ve been involved in a multitude of different technologies and projects as a corporate research engineer, developer, scientist, academic, etc. I’m on the board of a few universities as an advisor to business schools in cybersecurity and related fields, for example. In the work that we do in SCARS, what we are is a government registered crime victims’ assistance in crime prevention nonprofit organization, incorporated and registered in the state of Florida as a nonprofit, and we are going into our sixth year now. Our organization focuses on providing free services to online crime victims. We do research. We do advocacy. But our primary focus is on helping scam victims worldwide recover from the trauma of the experience that received.
Traci Brown: Because there is a lot of trauma. I mean, with any crime there is a lot of trauma, especially because you are focused more on crimes of the heart. It’s not just stealing your Amazon package off your doorstep, which happens. That actually happened to a friend of mine yesterday. You guys are a little bit different. Tell me about that.
Tim McGuinness: We focus on something called socially engineered cyber-enabled crimes. Cyber-enabled crimes is a term that was developed by the United Nations’ Office of Drugs and Crime to describe crimes where essentially it’s a human to a human in a relationship of one nature or another using the internet and cyber mediums to enable these crimes, as opposed to pure cybercrimes which are generally computer to computer, such as ransomware attacks, denial of service attacks, intrusions, breaches, all of those kinds of things. It may involve a human being, but we’re focused on predominantly the one-to-one types of crimes, and that can be a phishing attack, even though they’re using a one-to-many approach, that’s just to identify a target and then it becomes a one-on-one. It can be sextortion. It could be various kinds of extortion and blackmail scams, the IRS phone calls, dirty phone calls, these are all essentially part and parcel of what we call the socially engineered context.
Traci Brown: What is the primary . . . because you have different categories of crime that people come to you with. What’s the biggest one? Is it dating crime? Is it something else? Tell me about that.
Tim McGuinness: Well, dating crime is a misnomer. There really isn’t any such thing per se because dating implies the medium, i.e., a dating website. The reality is this is a relationship scam. Whether it begins on a dating website, or it begins on social media, or whether it begins in an email, it’s essentially the same crime. What we do focus on to a great extent is helping victims of romance scams. The reason why we do that is few of these relationship scams touch as deeply and profoundly and manipulates to the extent that these do. If you’re talking about a Lotto scam out of Jamaica, for example, you’re in and you’re out typically within a week. If you’re talking about an IRS or a social security phone scam, you’re in and out as soon as you make the payment. But in the case of a romance scam, these scams certainly go on for weeks, sometimes months. We’ve known cases where they went on for five years.
Traci Brown: Oh, yea.
Tim McGuinness: The steady bleeding of money from that victim until they were virtually homeless.
Traci Brown: Out of all of the things that you could pick to do, because you’ve been successful in business, why this? Were you touched by this? What’s your interest in this?
Tim McGuinness: There are two vectors that drew me into this. First off, casual observation when I was a senior executive at a company called TigerDirect.com of which I was a co-founder back in the mid-1980s. I observed when I was putting the company up onto AmericaOnline and CompuServe this phenomenon that began to emerge in the AOL chat rooms talking about these romantic-related scams that were occurring in AOL. But what really happened was when I put the company up onto the web in 1994 and 1995, we began to encounter a problem. Our attorneys were freaking out over the fact that I was allowing customers to write product reviews and leave comments on the products that TigerDirect.com was selling, so they prohibited it. Myself, and many companies in the industry, formed a consortium to lobby Congress to do something about this problem. It resulted in the creation of the Communications Decency Act Section 230 which gave immunity, blanket immunity, to every publisher for user-generated content. It is fundamentally the root of all evil that exists on the web today because it allows everyone, from Google to Facebook, etc., to turn a completely blind eye. In fact, they’re required to turn a blind eye because if they too proactively screen, then they’re going to end up incurring liability or negligence. The net result is everybody turns a blind eye and all of the publishers out there essentially say, “Whatever happens, happens, it’s not our fault, but we will create some terms and conditions so that when we choose we can throw people out.” But that’s resulted in, according to the former president of Facebook, well over 50% of Facebook profiles being fake.
Traci Brown: Oh really? 50%! Huh.
Tim McGuinness: In addition to that, in the year 2001 I had a unique experience where a scam attempt was made against by an actual Al-Qaeda cell operating in Afghanistan and in the Netherlands.
Traci Brown: Okay. Tell me about this. Tell me about this now. Al-Qaeda. What happened? I’m so curious. Tell me what happened and then I want to know how you figured out it was them.
Tim McGuinness: Okay. This will take a couple of minutes for the setup of this particular story. But the long and the short of it was I was a prolific web publisher at that point in time and had a lot of different websites. I was contacted by email by someone, a woman from Afghanistan, who had an interest in a website that I published on Middle Eastern archeology.
Traci Brown: Okay.
Tim McGuinness: I am that. I have the hat, the gun, and the whip.
Traci Brown: I see you’re wearing the shirt there. You do have the Indiana Jones.
Tim McGuinness: No. This is just khakis.
Traci Brown: (Laughing).
Tim McGuinness: It’s Tuesday. It’s an olive drab day.
Traci Brown: Okay. Got it.
Tim McGuinness: Anyway. The upshot was she expressed an interest in migrating to the United States. Of course, I was familiar with some of the horrors that were going on in Afghanistan with the Taliban at that point in time. She had two daughters and was afraid that they were going to be stoned at the halftime of a soccer game, which was in fact happening. It progressed over the next couple of months to the point where I did the investigation necessary to find out what it would take to get her a residency as an investor here in the United States, the amount of money. I even talked to her by phone on a real Afghani phone number. She told me that she had wealth, that she had precious stones that she was going to send to Holland, which is the gem capital of the world, to be liquidated into cash. From that, she would be able to get her investor’s visa. This progressed from about March, April, or so, more or less, into late July when a shipment arrived in Holland. Unfortunately, the story went that it was sent to me and that I would have to remove it from customs in Holland. So far, no major red flag at this point in time. This was sounding very authentic based upon the information I’d received.
Traci Brown: Now, are you in the States at this point?
Tim McGuinness: Yes, I am.
Traci Brown: You are.
Tim McGuinness: I am in the States.
Traci Brown: How can you get something out of customs in Holland?
Tim McGuinness: Well, I had quite a bit of familiarity with the movement of goods through customs in various countries, etc., so none of this surprised me. What I asked for were the customs documents so I could confirm what was being said, see how the shipment was categorized, what duties were being levied on it, because they were telling me there were a couple thousand dollars of duties’ fees or customs fees that I would have to pay.
Traci Brown: Okay.
Tim McGuinness: Not a problem, per se. Send me the documents so that I can verify and see if through my own channels and through another customs broker that I knew of in Holland I might be able to get this reduced or waived. Anyway, they never sent me those documents. We’re now into August and I basically said, “Look, without the documents, I can’t receive.” Even though I’m getting frantic calls from Afghanistan, “Please help, please help, please help”, I basically said, “Look, call me when you get the documents. Until then, there’s nothing I can do.” Now it hadn’t cost me an actual cent yet.
Traci Brown: Okay.
Tim McGuinness: A couple of weeks go by. We’re now into the first of September 2001. Eleven days later we have 9/11 happen. I, like everybody else on the planet, am in total shock because I’m watching this in real time because I just sat down at the breakfast table, had CNN on, and boom, the first plane hit. They rushed to the roof and started broadcasting, and I see the second plane hit, and of course you know the story over the rest of the day.
Traci Brown: Oh, yea, yea. I remember that day.
Tim McGuinness: I’m in shock.
Traci Brown: It was crazy. Yea.
Tim McGuinness: Yea. Nothing really happens. A couple of days later, the realization, slap forehead moment, happens when I realize when they start talking about who the terrorists were, their connection with Saudi Arabia, Iran, and Afghanistan, and I say to myself, “Oh my God, I have been colluding with Afghanis for the last six months.
Traci Brown: Oh.
Tim McGuinness: I called the FBI, tell them the whole story, gather up copies of every document, meet with an FBI agent the following day. I give him all of the information and nothing happens. I call back. This was September. I call back at the end of October, and they tell me there was no such FBI agent in their organization. I called you, and you guys had this guy call me, and now nothing. I don’t quite know what’s going on, but I don’t have anywhere else to go. We’re now into November.
Traci Brown: Hang on. Let’s back up. You called. Did you just look it up in the phonebook? Because we still had phonebooks back then.
Tim McGuinness: Yea. I called the local Tampa office of the FBI directly. They took my information and said they would have an agent call me back. He called me back within about an hour.
Traci Brown: But you said they didn’t call you back?
Tim McGuinness: No. He called me back. But when I called them about a month later, they said there was no such agent.
Traci Brown: Oh!
Tim McGuinness: The guy that I actually met with physically.
Traci Brown: Did they. . . ? Explain. I want to know all about that, but keep going because I know you’re going to . . .
Tim McGuinness: Not much more to this. The second week or so of November more or less, being an old fart time slips, but I call a friend of mine in Holland that was a business associate and asked him if he could put me in touch with the equivalent agency in the Dutch government because I was actually talking to people in Amsterdam and Rotterdam in Holland, so I knew that these guys were there, and I didn’t know what their real purpose was, etc., but I wanted to communicate this information to the Dutch government. He gives me the phone number of the agency. I call them the next morning at an earlier time of day, and I speak with one of their agents, give him all of the information, nothing happens. Go through Christmas. I’m not hearing anything from anybody except on or about the 23rd of December I see a news article online, which I can no longer locate, that talked about 12 Al-Qaeda operatives in a cell in Holland having been arrested by the Dutch government plotting the assassination of the Dutch queen when she would deliver her Christmas message in the Square in Amsterdam. I don’t know whether it’s the same guys or a coincidence. Then in January, towards late January, I get a call from another Dutch agency, and the first thing out of the guy’s mouth is, “Hi, my name is such and such. I’m with this agency. This call never took place. However, you’ve done a service for our country, and I wanted to personally call and thank you.” I got the sense that he was a senior official in whatever that agency was, which was their equivalent of their CIA, pre the European Union. We’re talking 2002 now. The result was he explained to me that yes, they had been able to arrest an Al-Qaeda cell operating in Holland with the intent to assassinate the Dutch queen based upon the information that I gave them. He went on to explain that they were aware of this kind of activity because Al-Qaeda received about 40% of its revenue from various forms of cyber and other crimes of this nature, confidence scams, advanced e-fraud, which is what this was, and other forms of scams that they were engaged in. That informed me to the point where I made a decision: I need to look much more closely at this, and I need to use some of my skills to help inform the public more about the dangers of these activities. For about the next 10 years, I operated a website through one of my companies in about – oh, I don’t know – 2010, more or less – actually, no, it was 2013. I put a fulltime employee on to be able to work with people that were communicating through the website. Our primary focus was to catalogue the way scammers were communicating, sharing stolen photos, etc. I really did not have a good grasp of the nature of the crimes, the mechanisms, the organizations, or the psychology behind it because I was not fully engaged because I was running my various businesses, including being an employee of TigerDirect still.
Traci Brown: Now, I have a question though. Did you ever figure out what happened with the FBI when you called them?
Tim McGuinness: To this day, I’ve never spoken with the agent that I spoke to. I don’t know who he really was, what agency he really was, poof, up in smoke, literally a spook. But, for whatever reason, he collected my information. I gave him copies of every email, phone numbers, everything, because my primary concern was not to have men in black show up at my door and arrest me in the middle of the night. In effect, these two elements, my involvement in the creation of the Communications Decency Act, my involvement in this one particular scam, and the realization that events like 9/11 were partially funded by these activities had a profound impact on me. I didn’t quite know where I was going or what I was going to do until another trigger event happened. This happened in the fall of 2014. We were contacted by a woman who was working as a domestic servant in Hong Kong who was from Indonesia. She was one of the hundreds of thousands, if not millions, of foreign domestic workers that work everywhere from Europe, the United States, throughout the Middle East, etc. Many are from the Philippines, Asian countries, but also from Latin America. This woman had been romanced scammed. She had borrowed $40,000 U.S. dollars on the street in Hong Kong from triads, from organized criminals, and was petrified because she just discovered that it was a scam. She had no idea how she was going to make this money back. She earned $500 a month. Never in her life would she earn enough money to pay this loan off.
Traci Brown: But she did it anyway. She just wasn’t thinking going into it. Her heart was . . .
Tim McGuinness: That’s not the way these scams work. It isn’t about thinking. It isn’t about heart. It’s about everybody can be scammed. Manipulation works on everyone unless you develop behaviors. Unfortunately, a couple of months later we discovered that she had committed suicide because she couldn’t face the reality of her situation. Now, I had already made the decision to incorporate SCARS at that point in time and had done it, but this really drove home the fact that nobody anywhere was addressing the real issues that victims face when they’re confronted with these cybercrimes.
Traci Brown: So then, what are you doing now? Let’s fast forward to today. If someone comes to you and they’ve been a victim in any kind of way of these person-to-person relationship scams, what’s the first thing that you do for folks?
Tim McGuinness: First and foremost, we do what we can to educate the public to avoid them, but avoidance education generally fails because nobody believes it will happen to them until it actually does.
Traci Brown: Right.
Tim McGuinness: The reality is that there are almost 30 million romance scam victims in the world. This year alone there will be an additional million romance scam victims.
Traci Brown: Oh, wow.
Tim McGuinness: Whatever else is going on. Online scams represent one of the largest industries in the world. It’s $3.4 trillion estimated for 2019.
Traci Brown: Yea. You were telling me that. That’s bigger than what? Germany or something along those lines?
Tim McGuinness: It’s the third largest economy in the world behind the United States and China.
Traci Brown: Wow.
Tim McGuinness: And it will grow to $6 trillion estimated by the end of next year. Now, that may not happen because nobody was planning on 2020.
Traci Brown: Right. Yea. This year’s been . . . .
Tim McGuinness: Nevertheless, it’s multi trillion dollars even this year. The reality is that first and foremost it is a recognition of the real nature of these crimes. We’ve been beating that horn steadily with government. We are a formal partner for Victims Assistance with the Department of Homeland Security through their Cybercrimes and Infrastructure Security Agency, and we’re registered with the DOJ office of Victims of Crime as well as with other entities around the world. We have partner organizations in 60 countries. When a victim comes to us, we’ve made a considerable effort to professionalize these services, to really understand the trauma that the victim is going through, and what they need in order to be able to move forward. Essentially, there are several things going on here. When a victim discovers a scam, it’s very much like losing a loved one, an instant death.
Traci Brown: Oh, yea.
Tim McGuinness: They go through grief, shock, it’s that experience. You’re going to go through the full grief cycle. Additionally, the manipulation that takes place during the scam is designed to continue to flood the victim’s brain with hormones, endorphins, dopamine, oxytocin, etc.
Traci Brown: Oh, sure.
Tim McGuinness: There is a physical addiction aspect that also takes place. The net result is that our job is to help them get through the stages so that they can emotionally recover and that may include referrals to appropriate professionals, whether that be a trauma therapist or a counselor, attorneys, law enforcement, financial professionals, etc. We provide them with the path, very much like Alcoholics Anonymous, of a recovery program that’s based on a peer-to-peer support group model moderated by individuals trained to be able to do that. That is essentially our model. We maintain support groups worldwide, online, and in some cases, physical, such as in Indonesia, etc., with phone support, physical meetings, etc. We’ve done physical meeting here in the United States as well. Our focus is primarily to help the victim disengage from the experience of the scam, put it in proper context, accept that they are a victim of a scam, that they’re not stupid, they didn’t overlook anything, they were expertly manipulated, and to be able to accept these facts so that they can forgive themselves and move forward.
Traci Brown: Now, let’s talk about that. When you say expertly manipulated, because my thought is that it’s some guy in a coffee shop in Nigeria.
Tim McGuinness: That might be 20 years ago.
Traci Brown: What is the profile of these guys, and I’m sure women, now? What’s the . . . ?
Tim McGuinness: There are many different levels of scammers operating. We’re just going to take, for example, the West African model. We’ll ignore the Chinese and Iranian and the Russian models for a moment.
Traci Brown: Okay.
Tim McGuinness: Also, ignore the Philippine model. Let’s talk specifically about West Africa. There are individual, what we call bugs, that are doing their scamming and they’re predominantly in small gangs, small groups. The groups may be anywhere from 3 to 20. In Ghana, for example, whole families will sit around the house where they’ve got good wifi and engage in scamming. The parents, the adult children, the younger children, the siblings, aunts, uncles, they’re all scamming together, male and female. But in Nigeria, this is a corporate process. The smaller gangs may be as much as a hundred, but they can also be corporations that own office buildings, that look to the outside world like outsourcing centers, which we in the West did a great job of training in the early 2000s. The same is true in India, which essentially uses the same model as West Africa. These are call centers full of scammers. They have supervisors. They have managers. They have training departments. They have benefits and HR departments.
Traci Brown: Oh, man.
Tim McGuinness: This is corporate. Some of these organizations are tens of billions of dollars in annual revenue. In the last 20 months there have been 4 major kingpins that have been arrested. Each of them had more than $1 billion in cash in their accounts. The most notable was Hushpuppi who was living a lavish lifestyle in his $100 million home in Dubai and was extradited to the United States to go on trial. I believe it was Chicago. These are people who are netting so much money that literally they have private jets to leave Nigeria every single day, transporting cash to their money laundering venues like Malaysia or Indonesia, Vietnam, or Cambodia where they launder it through the local banking systems, etc. That is how multi-trillion dollars worth of economic activity are taken care of. It’s not all done on Bitcoin. Additionally, scammers, when they can’t get money out of a victim anywhere, they will convert them to a money mule, to facilitate the transfer of money and assets. Victims will send the money to a mule, an unsuspecting person who thinks they’re helping out their lover who is an oil engineer working in Syria or a soldier on a peacekeeping mission in Zimbabwe or wherever it happens to be. Unfortunately, the FBI arrested about 800 such mules last year in 2019 and Europol arranged for the arrest of about 600 in Europe. Money mules are now at the root of the problem because they’re the facilitators of the money transfer, but it’s also, thank you, Facebook, every money transfer system on the planet is also used substantially for criminal activities. The net result is that these criminal activities are extraordinarily professional and corporate like.
Traci Brown: Huh. Wow. I was on the old coffee shop model, so I’m glad you updated me.
Tim McGuinness: That hasn’t existed for almost a decade and a half.
Traci Brown: Huh. Well, I’m . . .
Tim McGuinness: That’s not to say that individual scammers don’t go into cyber cafes. But the cyber cafes are all monitored by the governments now. If somebody is an idiot enough to scam in a cyber café, they’re going to get busted.
Traci Brown: Now, but the government, is the government in on this or not?
Tim McGuinness: No. No.
Traci Brown: I talked to a fellow who was a counterfeiting expert. I did a podcast with him. I can’t remember his name right now. It was one of the first ones I did, and he thought the government overlooked a lot of that because it was such good news for their GDP. So what’s your take on that?
Tim McGuinness: Yes. Overlooking it and being in on it.
Traci Brown: Okay. Alright, alright.
Tim McGuinness: You take the country of Ghana. They make more for their GDP in scamming than they do from foreign aid. Their actually university is like the technical university of nubasse? It’s overrun by scammers where the students are co-opted into belonging to the organization that effectively runs it. We estimate that 3 of the Ghanian universities are essentially schools of scam. Now in Nigeria, the Economic and Financial Crimes Commission is ethically very stable, though I am surprised to say that their own director was arrested this year for corruption.
Traci Brown: Oh, okay. Well, there you go.
Tim McGuinness: But in his case, it had more to do with, I think it was political pressure because he wasn’t sharing the money that he was receiving with other government agents. They decided to find a way to do that. Maybe I’m wrong, and we in fact have a partner in Nigeria now, so we hope to improve our closeness with their government quite substantially. But Nigeria seriously recognizes the problem and the fact that they’ve become a poster child for scamming in the world. Nigeria equals scammers.
Traci Brown: Yea, that’s what it is in my mind, for sure.
Tim McGuinness: Remember, Nigeria is one of the largest countries, if not the largest country in Africa, with more than 100 million in population. Scamming is a very, very small part of the economic activity. However, scammers scam Nigerians just as much as they scam anybody else that’s on the planet.
Traci Brown: I’ve heard that. That is crazy. I know you have a story on one of those. I don’t think we have time to get into it right now, but I think we may have you back to tell that because I think it’s ongoing. Tim, how can people get a hold of you? You are such a wealth of information. Is it best if they call you?
Tim McGuinness: We don’t offer telephone support at this point in time because our organization doesn’t have the funding to maintain 24-hour call support. That includes liability insurance, all the rest of it that goes with that, but you can reach us through AgainstScams.org, which is our primary website. Our encyclopedia of scams is called RomanceScamsNow.com. We also built the first global cybercrime reporting portal at AnyScam.com.
Traci Brown: Wow. Okay.
Tim McGuinness: Where we collect scam reports in real time and distribute them out to our recipients around the world instantaneously. We receive about 25 thousand reports a month, more than the FBI gets.
Traci Brown: Oh, man. Wow.
Tim McGuinness: The biggest problem with scams is primarily the question of reporting because the government has no idea anywhere in the world how large a problem this is. In the United States the FBI estimates that it’s around 3% to 5% of victims who will report this. Unfortunately, they can’t guess. They have to calculate the actual number reported. You take the government reports and multiply them by anywhere from 20 to 50 and you’ll come up with the right numbers.
Traci Brown: Wow. You’ve got your work cut out for you there at SCARS. Thank you for doing what you do. I hope I never have to use your services, but I know we’re going to be staying in touch and promoting each other a little bit here because that’s what we do is help each other out. I know you have a ton of people.
Tim McGuinness: A little over 5 million in 5 years.
Traci Brown: Oh, I love it. Thanks for doing what you do and being one of the good guys. Any parting words for people?
Tim McGuinness: Just to say that if you are a victim, visit our websites, read the 3 steps for a new scam victim which will tell you how to exit the scam and the immediate steps to take in your first few weeks to get you on the path to get over this experience and recover. Remember, these are serious traumas, as serious as a soldier coming from Iraq or Afghanistan. Victims suffer from PTSD regardless of what the crime type is. Remember, online crime is real crime. Regardless of what any friend or family member says, this is serious, and you’ve been seriously afflicted. Remember, we are a nonprofit. We survive based upon the supporters of our organization and every donation is greatly appreciated.
Traci Brown: Good deal, Tim. Thank you so much for coming on Fraud Busting!
Tim McGuinness: Thank you so much, Traci, for having me.
• INDUSTRY NEWS/BLOG, • SCARS MENTIONED, • VIDEO, 2020, and Tim McGuinness Ph.D.